Introduction

5.1 This chapter considers how, in the Australian context, the proposals advanced in chapter 4 for a single national personal property securities regime should be implemented.¹ It discusses the process by which securities over personal property are registered, and the way in which the existing series of registers can be rationalised. The special considerations which apply to company charges are also addressed.

The process of registration

Financing statements

5.2 Financing statement, not full documentation. Consistent with the Article 9 scheme and with the proposals of the New Zealand Law Commission, registration of a security should be able to be effected quickly and simply. This can be more easily achieved if a simple summary of the key points of the security transaction is lodged with the registering authority rather than the entire security instrument. This summary should be referred to as a financing statement. Registration should be effected when the registering authority enters the details contained in the financing statement into the register. This would have the effect of giving the secured party priority from the time the financing statement was accepted for lodgment by the registering authority. It is provisionally proposed that financing statements give details of the following particulars

• the names and addresses of the parties
• the date of the transaction giving rise to the security
• a short description of the property
• the amount of money to be repaid, or how to work it out
• if stamp duty is payable, whether it has been paid.

If further particulars are needed, regulations made under the law should be able to prescribe these requirements. The financing statement should have to be signed by the debtor before being registered.

5.3 Amount of money. Including a statement of the amount of money owing in relation to a secured loan enables potential lenders to assess more accurately their priority position in the event that the borrower defaults. The need for lenders to be given this opportunity is especially important where registered securities provide for further advances or where they attach to after-acquired property.

5.4 Stamp duty. A financing statement should disclose whether or not stamp duty payable on the underlying transaction has been paid. If stamp duty is due but has not been paid, the security should be able to be provisionally registered.² Because of the importance of stamp duty to State and Territory budgets, it is important to ensure that this matter is examined when a benefit is being conferred on parties to dutiable arrangements.

Proposal 33 Registration should be effected by lodging a financing statement, signed by the debtor, which should contain the names and addresses of the parties the date of the transaction that gives rise to the security a short description of the property the amount of money to be repaid, or how to work it out if stamp duty is payable, whether it has been paid any other information prescribed.

Provisional registration

5.5 Provisional registration needed. Where a secured party fails to strictly comply with the requirements for registration, the security should be provisionally registrable. The effect of provisional registration should be to give the secured party priority which, upon the registration being completed, back-dates to the date on which the security was provisionally registered. Provisional registration should be available where

• registration is effected before the security transaction comes into operation
• the financing statement is not signed by the debtor, or is otherwise incomplete
• there is a question about the payment of stamp duty.

Provisionally registered securities should entitle the secured party to priority, upon full registration, from the date of provisional registration.

5.6 Financing statement not signed. It is provisionally proposed that financing statements should have to be signed by the debtor. However, a debtor should not be able to defeat a creditor’s priority merely by refusing to sign the financing statement. This should be so even if there is a genuine dispute about the correctness of the financing statement. Instead, the creditor should be able to have the financing statement registered even if it is not signed by the debtor. In such a case, the creditor should have to certify that the financing statement is, the signature apart, accurate. Registration should be provisional. The registering authority should have to notify the debtor of the fact of provisional registration, giving the debtor a short time, say, 28 days, within which to object to registration or commence proceedings to have registration avoided. If it does neither of these, registration should cease to be provisional and lose effect at the end of the 28 days.

5.7 Financing statement otherwise defective. Under some bills of sale legis-lation, a technical or minor error in the documents lodged may totally invalidate the bill. This is unsatisfactory. It will be less likely to occur under these provisional proposals because less information is required for a financing statement than is necessary for valid registration of a bill of sale. However, to reduce further the risk of technical invalidity, provisional registration should be available - as it is under the Corporations Law - for incomplete financing statements. The registering authority should have a discretion to register an incomplete financing statement, thereby giving the creditor the benefit of registration at the earliest possible date. However, it should notify the creditor that the statement is defective, and why, and allow a reasonable time (not less than, say, 28 days) for the matter to be rectified. Once the deficiency is rectified, registration should cease to be provisional. If it is not rectified, the creditor should get no benefit from registration at all.

5.8 Stamp duty. A lodging party should not have to certify that the documents comprising the security transaction have been duly stamped. To require this would, in some cases, be to make the lodging party certify as to both liability for and amount of duty - questions that may be in dispute with the stamp authorities. The lodging party should have the benefit of registration, subject to satisfactory resolution of stamp duty issues, where it appears to the registering authority that there is or may be a liability for duty. The registering authority should have to register unstamped documents provisionally until evidence of stamping is produced.

Proposal 35 A financing statement should be able to be registered provisionally if the financing statement is lodged for registration before the security transaction comes into operation or is not signed by the debtor or is otherwise incomplete or there is a question about the payment of stamp duty. Where the financing statement is not signed by the debtor, the creditor should have to certify that the financing statement is, the signature apart, accurate, but the registering authority should have to notify the debtor of the fact of provisional registration, giving the debtor 28 days to act. Where the financing statement is signed by the debtor but is otherwise incomplete, the registering authority should have a discretion to register the statement provisionally, but should notify the creditor that the statement is defective, and why, and allow 28 days for the matter to be rectified. The registering authority should have a discretion to extend the period for rectification i the circumstances warrant such an extension.

Changes in securities

5.9 Some alterations to security arrangements agreed on between the parties could, technically, involve the creation of a new security. It will be necessary to ensure that lenders who enter into such alterations do not lose their priority for this reason alone. It is therefore provisionally proposed that the following alterations should not affect the lender’s priority position, and therefore should not need to be registered

• a change in the period of registration
• a change in the identity of the secured party
• a change in the priority order
• an increase in the amount owing that represents further advances in accordance with the security transaction, or that represents interest.

All other kinds of alterations should be treated as new security arrangements for the purposes of the regime. Lenders who desire the protections afforded by the regime should have to lodge new financing statements in these circumstances.

Proposal 36 A new financing statement should not need to be registered for an alteration to a security arrangement that is merely one of the following a change in the period of registration a change in the identity of the secured party a change in the priority order an increase in the amount owing that represents further advances in accordance with the security transaction, or that represents interest.

Events affecting securities

5.10 Notice to be filed. While there should be no requirement for a registered secured party to lodge a new financing statement in the situations identified above the secured party should nevertheless be required to file a notice if and when

• a floating charge crystallises, or
• a security right is exercised.

Discharge of security

5.11 The Corporations Law allows a debtor to obtain at any stage from the secured party a statement that the security is wholly or partly discharged. This facility should also be included in these proposals for a new personal property securities regime: a statement that the security has been wholly discharged should be able to be registered by the debtor. In addition, once a registered security has been wholly discharged, the secured party should have to lodge a notice to this effect. This will help to ensure that, so far as practicable, the register reflects accurately the position of the security.

Proposal 38 The creditor under a registered security should have to give to the debtor, on written demand, a statement that the security is wholly or partly discharged. If partly discharged, the extent to which it is discharged should have to be specified. Proposal 39 Such a statement, if it shows that the security has been wholly discharged, should be able to be registered by the debtor. Proposal 40 The secured party should have to lodge for registration a notice of discharge when the security is fully discharged.

Register searches

Searching the register

5.12 The purpose of the proposed personal property securities register is to give notice of existing encumbrances over specified property so that future potential lenders are better able to assess their priority position if finances are advanced and the borrower defaults. To achieve this aim the proposed regime must provide an appropriate search procedure. The provisional proposals are based on the Corporations Law s 272 and assume that electronic searching of the register will be possible. Anybody should be entitled to search the register. Upon application being made to make such a search, the applicant should be issued with a ‘record of search’. This document should be admissible as evidence of its contents and should be able to be relied upon by the applicant as the position of the register. It should therefore be conclusive as to registration at the time the search is made. If a security is provisionally registered, the search record should reflect this. Apart from this, it is proposed to leave the administration of searching to the registering authority, in the light of the technology available.³ So far as is practicable, searchers should be able to search either by name or by asset. Computerisation of the register will make it easier for on-line access to the register. On-line searching facilities should be made available to those who have the technology to use it. Regulations should cover matters such as the mode of searching and fees.

Proposal 41 There should be provision for the register to be searched by any member of the public. A ‘record of search’ should be issued on application, and should, if properly authenticated, be admissible as evidence of its contents and conclusive as to registration of the securities it discloses.

Secured party to provide information on request subject to privacy considerations

5.13 A financing statement is designed to contain the minimum amount of information necessary to indicate the existence of the security, and whether the amount that it secures is likely to increase otherwise than on account of interest. Because so little information about the underlying transaction is provided it will be necessary, subject to privacy considerations, to require lenders who choose to register their securities to provide copies of the security instruments where any reasonable request is made. The lender should be able to charge a reasonable fee for meeting this request. To some extent, this undercuts the rationale of a public register as relieving those who search it from the cost of doing their own investigations with the parties to the transaction. However, it is also important to protect the privacy of arrangements where the debtor is a natural person. Requiring security instruments contracted by an individual to be made available without the debtor’s consent is contrary to the policy behind the recent credit provider amendments to the Privacy Act 1988 (Cth).⁴ To achieve this balance between the need for information and the need for privacy it is provisionally proposed that corporate secured lenders should have to provide to anyone who asks for it, and pays the prescribed fee, a copy of the relevant security documents. Where, however, the debtor is a natural person the debtor’s consent must be obtained before the documents can be released.

Proposal 42 Creditors under a registered security should have to provide a copy of the relevant security document to anyone who makes a reasonable request for it and pays the prescribed fee. Where the debtor is a natural person, the debtor’s consent in writing should first be obtained.

The Register

The desirability of a single personal property securities register

5.14 Introduction. A new personal property securities regime which resolves priority disputes between competing secured parties equitably, quickly and cheaply is best achieved by replacing the multitude of existing registers with a single register. This solution has the advantage that lenders and other persons who need to find out the extent to which property is already encumbered can have their enquiries dealt with expeditiously without having to resort, in an environment of more than one register, to a time-consuming search for the most appropriate register. However, a regime with a single register also poses a number of difficulties.

5.15 Industry-specific security enquiries. Persons whose security enquiries are confined to a particular industry (for example, merchant shipping) may prefer a register that only records securities in relation to a particular type of property (for example, ships). Registers such as those which record security interests over ships⁵ have an important function from the point of view of the industry concerned. It is conceivably much easier for a stevedore, for example, to access a single register which contains all security interests over ships than to have to access a register which holds interests over all types of personal property. The ease with which the stevedore is able to locate existing encumbrances is further improved if the point of access is the peak body of the industry concerned. Overseas parties interested to learn whether an asset such as a ship is already encumbered will be more inclined to contact the industry directly; it may not occur to them immediately that the security information which they seek is listed on a register which holds information not only about ships but about all other types of personal property as well, and that this register is administered by, for instance, a government department rather than the shipping authorities themselves.

5.16 Existing national registers. A number of national registers already exist, for example, for ships, designs, patents and company charges. These registers do not exhibit the problems currently associated with Stated-based registers. Hence, there may be no need to change systems of registration that are administered on a national basis.

5.17 National REVs scheme proposal. The question whether there should be a single personal property securities register has been further complicated by moves by the States and Territories to establish a uniform national Register of Encumbered Vehicles (REVs). Given the already significant investment in the establishment of the national REVs scheme. the REVs proposal should not be further deferred by any proposals to include motor vehicle encumbrances in a single national register of personal property securities.⁶

5.18 Consultant’s analysis - cost of establishing a register. The final reason why a single register may not be appropriate is essentially an economic one. The cost of establishing a single register for all personal property securities is likely to be high - a fact demonstrated by the significant investment in the establishment of the Australian Securities Commission’s national computerised database.⁷ This cost is likely to be particularly high if all existing registers have to be collapsed into it. Whether the benefits which will be derived from such a register outweigh the cost associated with its implementation is a vital consideration.

5.19 Building on an existing register. An alternative to establishing an entirely new register is to use an existing register as the basis of the new database. The Credit Reference Association of Australia Ltd (CRAA), for example, has a computerised register that contains credit information on many individuals and some corporations. The CRAA is, however, a private body and its operations are not subject to Parliamentary scrutiny. The Australian Register of Company Charges (ARCC) administered by the Australian Securities Commission (ASC) is also a national database. Unlike the CRAA, the ASC is subject to Parliamentary scrutiny. The ARCC commenced operation on 1 January 1991. It is a national computerised database with two major elements, namely

• ASCOT - a summary of information submitted to companies
• DOCIMAGE - which allows users to see an electronic image of any company document submitted to the ASC.

This facility would seem to be the logical basis for a national register of securities. It is already established as a single, national database and can be searched remotely using on-line computer facilities located at ASC business centres as well as in many regional centres. Using the ARCC is likely to be the option of least expense to enable registration of securities over individually-owned personal property as well as company property.

Provisional proposal

5.20 It is provisionally proposed that existing national registers should be preserved. Where a security is unable to be registered on an existing national register, it should be able to be recorded on a new personal property securities register. These proposals should not affect current endeavours by the States and Territories in relation to the establishment of a national REVs scheme for interests in motor vehicles - this proposal should continue to be developed unless further evidence reveals that it would be more economic to assimilate it within the national personal property securities register. The proposed register, other national registers and the national REVs should be able to be linked in such a way that persons searching one register will be able to readily access the other registers. The effect of this will be to create a comprehensive single register for personal property securities in keeping with the provisional proposals for a single, national personal property securities regime. Regulations should prescribe the registers which should be linked to the proposed national personal property securities register.

Proposal 43 Existing national registers (for example, ARCC and the national REVs scheme proposal) should be continued. Other existing national registers for specifc forms of property should be reviewed. A new national register should be established for all personal property securities other than those covered by continuing registers. All registers should be linked in such a way that persons searching on one register will be able to readily access information contained on the other registers. Regulations should prescribe the registers which should be linked to the proposed national personal property securities register.

Asset- or name-based register?

5.21 Introduction. The Register of Encumbered Vehicles established under the chattel securities legislation in each relevant State and Territory is an example of an asset-based register. Persons interested to learn whether a particular vehicle is already encumbered are able to search the register using information which uniquely identifies the asset in question, for example, the car’s engine serial number and/or the car chassis number. Name-based registers function by identifying individual debtors and other parties to a security arrangement. Most existing registers are arranged under the names of the parties to the security arrangement involved.

5.22 Limitations of each type of register. It is important to consider when deciding how to establish a national register whether the register should be administered on the basis of the type of asset secured, the names of the parties to the security arrangement, or both. The difficulty in establishing asset-based registers is that many kinds of property cannot be uniquely identified.⁸ As Simon Begg notes

[t]his information - of value to creditors or, more accurately, intending creditors - is only provided by a name-indexed registration system.⁹

A further limitation of asset-based registers is that security agreements which create rights to chattels where at the date of the agreement the chattels have not been ascertained cannot be registered.¹⁰

5.23 Provisional proposal. The personal property securities register should be flexible enough to accommodate both kinds of index. In relation to existing registers, it is provisionally proposed that in the event of a conflict between a name-based index and an asset-indexed register, the asset-indexed register should prevail.

Proposal 44 The proposed national personal property securities register should be both asset- and name-based. In relation to existing registers, in the event of a conflict between a name-based and an asset-based register, the asset-based register should prevail.

The legal framework

Introduction

5.24 A legal regime must be devised that will support the establishment of a national registration system for all personal property securities. An essential criterion of the legal regime is that it must validly regulate security rights which arise out of contracts between non-corporate entities or individuals. Security rights which arise out of contracts where a company is the borrower would seem to be already covered by the ARCC, although amendments to the Corporations Law are desirable for consistent and comprehensive coverage.

Possible option

5.25 Introduction. In consultation with the VLRC and the QLRC, the Commissions considered a number of possible options for implementing the proposed personal property securities regime. One of these options involved using the Corporations Law Pt 3.5 as the vehicle to provide the legal framework necessary for the new regime. Although the focus of the Corporations Law is the corporate sector, it could be extended to provide for a single regime for all security arrangements involving personal property, including personal property of individuals (natural persons) and of bodies corporate not presently covered by the Corporations Law. This is made possible by the scheme of the Law.¹¹ However, the Commissions has resolved not to proceed with this option at this stage. Instead, it is provisionally proposed that uniform Commonwealth, State and Territory legislation should provide the legislative vehicle for implementing the proposed regime.

5.26 Commonwealth and State/Territory uniform legislation. One option for the establishment of a personal property securities regime is the enactment of uniform Commonwealth and State and Territory laws. The Corporations Law Pt 3.5 could be amended to provide the model which would apply as presently to all securities over corporate property. This model legislation could then be enacted by each of the States and Territories.

The Corporations Law

5.27 Scheme of the Law. The Corporations Law is a unique, and uniquely Australian, inter-governmental arrangement. Its scheme is as follows:

• The Corporations Act 1989 (Cth) is the core law. It is made by the federal Parliament.
• The Corporations Act 1989 (Cth) s 82 reads ‘The Corporations Law is as follows:’. The full text of the Corporations Law then follows. In effect, the whole of the Corporations Law is contained within s 82.
• The Corporations Act 1989 (Cth) s 5(a) gives the Corporations Law in s 82 effect as a law of the Australian Capital Territory.
• Each State and the Northern Territory has applied the Corporations Law in the Corporations Act 1989 (Cth) s 82 as a law of the particular State or Territory. The Corporations Law is, therefore, a national law but at the same time it is a ‘law of this jurisdiction’.

5.28 Effect of Pt 3.5 on securities over property of a company. The Corporations Law Pt 3.5 already makes extensive provision for securities given by companies over their property. It provides that each company that gives a charge of a specified kind over specified kinds of its property must, within 45 days, register the charge with the ASC.¹²

5.29 Policy considerations. A key policy behind Pt 3.5 in particular and modem corporate regulatory regimes (such as the Corporations Law) in general has been an increased onus on management to provide relevant information. This reflects a growing community desire to ensure that directors act with shareholders’ best interests in mind by requiring disclosure of information as a basis for investment and credit assessment. The Corporations Law now requires - for the benefit of shareholders, creditors and potential creditors - public notification of the extent to which companies raise money on the security of their property. This generally enhanced emphasis on disclosure was the subject of a recent report by the Companies and Securities Advisory Committee (CASAC)¹³ wherein it was proposed that companies should be required to disclose to the ASC and to the market all material changes in their situation. The recent shift from annual reporting to more frequent reporting¹⁴ and stricter requirements in relation to form and content of prospectuses¹⁵ are reflections of this increased emphasis on disclosure and the importance of the duties owed by managers to shareholders, creditors and the market in general. Public disclosure in a register of whether, and the extent to which, the property of a company is being used as security is therefore consistent with long standing policy in relation to corporate regulation.

5.30 A possible resolution - repeal of Pt 3.5? Professor A Duggan¹⁶ has suggested that the Corporations Law Pt 3.5 be wholly repealed and that the proposed uniform State and Territory laws be the only laws that deal with security given by companies over their property.¹⁷ The suggestion does not apparently preclude compulsory registration by a company of a security over its property if that were required for reasons of corporate regulation.¹⁸ However, the creditor’s priority would be governed, not by the company’s registering under such a requirement, but by the creditor’s registering in a different register under the uniform State and Territory legislation. The proposal is aimed at bringing all personal property securities under a single regime, with a single register. This would lead to uniformity and avoid the need to marry up the Corporations Law and laws relating to personal property securities. To this end, Professor Duggan’s suggestion achieves the objectives of simplicity by overcoming present difficulties which arise out of complex and inconsistent regimes between each of the States and Territories.

5.31 The Commissions’ view. However, there are significant difficulties with this suggestion. Its principal advantage is also a disadvantage - by ignoring the current Corporations Law and its application in this area it fails to deal with the overlap and the need to resolve inconsistencies arising from the different purposes of the laws. First, it would involve, for all but the smallest securities, two registrations, one by the creditor, the other by the debtor company. This would simply increase the cost of borrowing without discernible benefit. Second, anomalous and unfair results could ensue. For example, if the first lender has chosen not to register its security in the uniform State and Territory register, but the debtor company has registered the security in the ARCC as required by the Corporations Law, a later lender who searches the ARCC could take priority over the earlier lender although it was fully aware of the earlier security. In spite of such concerns comment on Professor Duggan’s suggestion is sought.

5.32 Modification of Pt 3.5 to achieve both sets of policies. The better approach seems to be to modify Pt 3.5 so that both the policy objectives that it presently pursues, and the objectives of the proposals made elsewhere in this Discussion Paper, are achieved. This would be accomplished by amending Pt 3.5 to make it consistent with the provisional proposals in chapter 4. However, a number of modifications would be needed in the application of those proposals to securities over property of a company, to ensure that both sets of policy objectives can be met. These modifications are discussed in the following paragraphs.

5.33 Companies to register securities that they give. The principal modification needed is to preserve and extend the requirement in Pt 3.5 that a company that gives a security over its property register the security with the ASC in the ARCC. Pt 3.5 should be extended to cover all kinds of securities, over all of the kinds of property (if of a company), that the tentative proposals in chapter 4 contemplate. Registration by the debtor company should give the creditor the protection that registration by the creditor affords under the proposals in chapter 4. This will eliminate the need for dual registration. The present requirement in the Corporations Law Pt 3.5 that the documents and instruments constituting the security transaction be lodged should not be disturbed, although the financing statement should also have to be lodged. Any officer of the company nominated for this purpose should be able to sign the financing statement.

5.34 Time for registration. Given that the debtor company is to be compelled to register the security it gives over its property, a time limit will need to be fixed. Paragraph 2.31 described the different time limits for registering securities under the existing law. The Corporations Law presently gives 45 days. This is clearly too long. The time should be fixed at 15 business days after the security transaction concerned takes effect. A security can, under the draft proposals, be registered before the security transaction takes effect. Late lodgments should, however, be accepted and registered, but would only take priority from the time of lodgment, and whatever liability flowed from the contravention involved in the failure to register would not be affected.

5.35 Notifying exercise of security rights. A secured party that exercises a security right should have to register notice of the exercise. The ASC should then be able to notify the secured party that it will remove registration unless advised that the obligation secured is still unperformed.

5.36 Later debentures need not be registered. The Corporations Law ss 263(2) and (6) provides that securities issued in a series, such as debentures, be registered, but that those after the first need not be registered. Priority dates from the time the notice relating to the first debenture is registered. This provision is clearly sensible, and avoids cluttering up the register with many instances of the same kind of security. It should be continued.

5.37 Avoiding preferences. One other provision will need to be kept in Pt 3.5. It prevents avoidance of the preference provisions of the Corporations Law.¹⁹

Proposal 45 The Corporations Law Pt 3.5 should be amended to make it consistent with the tentative proposals in chapter 4 with the following modifications: the requirement in Pt 3.5 that a company that gives a security over its property be required to register the security with the ASC in the ARCC should be preserved registration of a security by the debtor company should give the creditor the protection that registration by the creditor affords under the proposals in chapter 4 the documents and instruments constituting the security transaction should have to be lodged, as well as a financing statement the time limit for registration should be 15 business days after the security transaction concerned takes effect late lodgments should be accepted and registered, but should take priority from the time of lodgment, and should not affect liability for failure to lodge only the first of securities issued in a series, such as debentures, need be registered the secured party that exercises a security right should have to register notice of the exercise the Corporations Law s 267 should be retained.

Other existing laws

5.38 It will be necessary to undertake a review of other existing Federal, State and Territory laws relating to personal property securities to ensure their consistency with the new regime. Provisions which are no longer necessary should be repealed. Any provisions which are to continue should conform to these proposals as to priorities. It will be necessary for this review to be undertaken within each jurisdiction.

FOOTNOTES

1. In October 1991 Mr John Dufley, one of the ALRC’s consultants, presented to the ALRC a research paper discussing the technical and practical aspects of implementing a single national registration system for personal property securities. The Commissions gratefully acknowledge Mr DuBey’s assistance.

2. See paragraph 5.8.

3. See paragraph 5.20 for the provisional proposal in relation to the form of the register, and paragraph 5.23 as to whether it should be asset-based or name-based.

4. See Privacy Amendment Act 1990 (Cth). This Act commenced operation on 24 September 1991.

5. Aircraft, like ships and most modes of transport, are examples of personalty which do not remain stationary in any particular jurisdiction for a prolonged period of time. A register, administered by the Civil Aviation Authority, currently exists for liens over aircraft. The reliability of this register is apparently in doubt. The ALRC is informed that the existing legislation establishing this register fails to permit registration of securities which cannot be classified as liens. Further it cannot be relied upon as an accurate record of all lien interests over aircraft because registration of these types of interests is not compulsory.

6. At a meeting held in Adelaide in November 1992, the Premiers and Chief Ministers agreed to develop a national vehicle security registers as soon as possible. They resolved that “[a]ll Australian jurisdictions operate security systems but there is no national system or linkage of the separate databases, nor is there uniform legislation. The fragmentation of the present system has contributed to widespread lossess incurred by consumers, the motor trade and the finance industry. Premiers and Chief Ministers now wish to accelerate work to establish a national vehicle securities register. The register, which would have the potential to be expanded to cover other consumer items, would operate on a full cost-recovery basis. Its establishment costs could be recouped from the motor vehicle and finance industries. With the hill support of Premiers and Chief Ministers it is anticipated that this important proposal will be given high priority and can be operational at an early date.

7. These issues are examined in greater depth in the Research Paper produced by one of the ALRC’s consultants, Mr John Dulley.

8. eg bulk items such as grain.

9. SW Begg, The Registration of Security Interests in Chattels, (1981) 55 ALJ 649, 652.

10. Ibid.

11. See paragraph 5.27.

12. Property excluded includes choses in action, land and fixtures. The kinds of charges excluded include pledges, deposits etc and securities that are not charges or mortgages: see Corporations Law ss 262 and 9 (definition of ‘charge).

13. Companies and Securities Advisory Committee (CASAC), Report on an Enhanced Statutory Disclosure System, September 1991,21.

14. The Companies and Securities Advisory Committee (CASAC) has advised that while there could be considerable merit in quarterly reporting, as matter of policy there should be no mandatory quarterly reporting requirement at this stage: CASAC, op cit, September 1991, 27.

15. See generally Corporations Law s 1022.

16. Henry Bourne Higgins Professor of Law at Monash University.

17. Professor A Duggan Submission 17 July 1992. Professor Duggan is in favour of a uniform State and Territory legislative approach.

18. However, the submission suggests that such requirements are unnecessary, and that disclosure of the security in the accounts in the company’s annual report should be enough.

19. Presently in Corporations Law s 267(1); it prevents an officer of a company from enforcing a security in his or her favour within 6 months without leave of the Court.